Milk Prices Soar as Dairy Chain Buckles Under Strain

May 17 , 2025. By YITBAREK GETACHEW ( FORTUNE STAFF WRITER )

Milk production and distribution disparities have a cascading impact on small—and large-scale dairy enterprises. Industrial processors have been forced to drastically cut back production, facing constraints from raw milk shortages and the need for rigorous quality checks. The shortages echo throughout the supply chain, with suppliers paying a premium for quality milk to maintain their standards. This domino effect sees consumers experiencing a rollercoaster of fluctuating prices and inconsistent quality, shaping a crisis several families feel, reports YITBAREK GETACHEW, Fortune Staff Writer.

Azeb Asamen sat in the modest living room of her small home near Haile Garment Square, in the southern outskirts of Addis Abeba, her brow furrowed as she stared at the empty milk container beside her. At 42, and with four children to feed, she felt reaching a breaking point. Only a fortnight ago, she used to pay 3,000 Br a month for a litre of milk to feed her youngest two, who are one and three years old. Now, the price has soared to 3,600 Br, a 20pc jump she cannot afford on her civil service monthly salary of 9,000 Br.

Her husband brings in 11,000 Br through odd jobs, but most of that income vanishes under the weight of medical bills and rent. Groceries, fuel and other essentials demand every remaining Birr, leaving little for the milk Azeb believes is important for her children’s enrichment.

“Of course, my husband earns more than I do," she told Fortune. "Even with his income, we cannot afford it.”

Breastfeeding up to three years is widely recommended, she knows, but sickness sometimes keeps her bedridden. When she cannot nurse, powdered substitute is the only option.

“I get sick from time to time," said Azeb. "When I can’t breastfeed, I'd have to buy milk."

But not at the prices that are available now.

Unbeknownst to her, dairy producers have been caught in a cascading crisis lately.

Gebru Temesgen, once part of a cooperative dairy enterprise, now tends 11 cows on his private farm in the Kolfe Bethel area. Until recently, he sold more than 280 litres of milk daily through a cooperative; now he barely reaches 120 litres. Wheat straw feed, his main fodder, cost 2,300 Br a quintal last month. Last week, it went up to 2,800 Br.

“We’re now at a point where feeding them feels like a luxury,” he said.

He had no choice but to raise his price to keep his farm afloat, but production has fallen in step with rising costs.

Farmers such as Gebru face erratic market prices. During the fasting season, when the Orthodox Church's faithful abstain from animal products, they sold milk at 60 Br a litre. Now, they ask 85 Br.

“Even before the fasting period, milk was expensive," Gebru told Fortune, ruefully. "Now the price changes faster than the weather.”

His dwindling supply coincides with surging demand, he noted, a reminder that shortages and access are two sides of the same struggle.

Those studying the market trace the current squeeze to a mix of factors. Post-fasting consumption rebounds sharply, but production remains steady at best. Official figures show that 9.2 billion litres of milk were produced in the third quarter of the current fiscal year, leaving the sector 2.9 billion litres short of its 12.1 billion-litre annual target. Cow milk represents 80pc of total output. Ethiopia’s per capita milk consumption is estimated at 66Ltrs a year, far below the recommended 200Ltrs. Despite the promise of crossbreeding programmes around Addis Abeba, Adama and Debre Berhan, gains in yield mean little without reliable distribution and market connections.

With more than 2.8 million registered dairy farmers across the country — many starting out with a single cow — the rural landscape brims with operators who are nonetheless fragile in the face of rising inputs and uneven regulation.

Kuribachew Endale, head of the Dairy Development Department at the Ministry of Agriculture, blames illicit milk trading, regulatory apathy, and underfunding for compounding the crisis.

A new land-use directive from the Ministry of Water & Energy has only worsened matters. Designed to protect riverbanks and prevent water pollution, it enforces buffer zones that effectively ban urban dairy operations near waterways.

Farmers who rear cows in Addis Abeba’s tight quarters are compelled to relocate or shut down.

“Space constraints aren’t an excuse,” Kuribachew insisted, arguing that producers should find land with proper drainage and distance from rivers.

However, relocation is easier said than done for several farmers. If they are found without a waste disposal system, they face harsh fines.

Desalew Shitu, owner of Mekdi Fresh Milk & Yoghurt near Ayer Tena Mosque, recalled how suppliers vanished overnight. Small-scale producers prefer selling in bulk to larger buyers or exiting the business entirely rather than risk penalties. Once he paid 85 Br for unprocessed milk; it was 95 Br or more last week. At his shop, a half-litre of yoghurt costs 65 Br to 75 Br, while milk ranges from 90 Br to 130 Br. His daily sales have fallen from 80Ltrs to 65Ltrs, illustrating the wholesale squeeze on families like Azeb’s.

“The people who used to supply us regularly during the fasting season are no longer there,” he said.

Input costs tell much of the story. A cow producing 20 litres a day typically needs about 10Kg of feed. Concentrated feeds now fetch 3,400 Br a quintal, up from 2,800 Br. Clean water, essential for cow health and milk safety, grows scarcer and pricier. Feed prices have climbed so steeply that, in the words of Kuribachew, “they are at a critical level."

"As a country, we face a serious challenge in ensuring sufficient availability,” she told Fortune.

Recent tax policy changes have complicated the mix. A new directive from the Ministry of Finance removed VAT exemptions on animal feed, previously one of the few tax-exempt agricultural inputs.

“Most agricultural inputs are tax-free, but feed is now excluded,” Kuribachew conceded.

She disclosed an ongoing discussion to revisit the decision. Soybean cake, a vital protein source in livestock feed, suffered a similar fate. It traded without VAT added under an assumed exemption for nearly nine months. Now, authorities say the exemption applies only to soybean flour, not cakes, a costly distinction that echoes through the industry.

Industrial processors have felt the shockwaves, too. Shola Milk, once producing 80,000Ltrs of pasteurised milk daily, has cut back to 50,000Ltrs. To maintain output, it now look for sources from distant markets — Gojam, Wollega, Jimma, Debre Berhan and Wollo — and sets up refrigeration units in each locale.

“We plan to source from all over the country,” said Abnet Getye, a production officer at Shola’s plant. “We prioritise quality over price. We’re willing to pay more for it.”

Even so, Shola Milk, under Midroc Group, after it acquired the dairy through privatisation, has raised its own retail price. A half-litre of pasteurised milk jumped from 60 Br to 70 Br. Yoghurt supplies have thinned, and quality varies widely.

Harme Milk confronts similar issues. Its intake has fallen from 30,000Ltrs a day to 20,000Ltrs.

“Work needs to be done on commercial farms to get quality milk,” said Kibret Dimir, processing manager who sources from areas like Fiche town, 120Km north of the capital.

A trifecta of pressure — rising feed costs, raw milk shortages, and illicit trade — has caused even large suppliers to struggle to survive.

Food safety regulators, too, point to malpractice. Estifanos Getachew, food and health related regulatory director at the Addis Abeba Food & Drug Authority, warns of dilution and adulteration. Some producers water down milk to stretch supplies, exposing consumers to unsafe liquids.

“It’s not only about adding water," he cautioned. "It’s about whether the water is safe.”

The Authority inspects food establishments twice a year and up to four times for high-risk operations. Last year, its inspectors confiscated 6.5 million Br worth of butter adulterated with foreign substances. Licensing loopholes and unsafe transport — milk ferried in open trucks alongside fertiliser — also threaten quality.

“Milk should maintain its cold chain,” Estifanos insisted.

It should be refrigerated within 90 minutes of extraction. Against this backdrop, the Ministry of Agriculture is drafting a new bill to regulate the dairy supply chain more strictly, emphasising storage and quality standards.

Aemiro Tazeze (PhD), an agricultural economist who teaches at Bahor Dar University for three years now, after spending 15 years at Haromaya University, applauded the effort but warned that systemic cracks run deep.

“There is progress in production, but market linkage is poor,” he said.

For families such as Azeb’s, the crisis is already personal. Structural reform, supportive regulation and investment in cold chains may secure a future for this essential food. But until those changes arrive, mothers like Azeb will continue to make agonising choices between rent, medicine and the glass of milk that once seemed a simple necessity.

“It's difficult to say whether milk will be available anymore,” Gebru admits, echoing the uncertainty felt by farmers, processors and consumers alike.

PUBLISHED ON May 17,2025 [ VOL 26 , NO 1307]

Share this...

Facebook

Pinterest

Twitter

Linkedin